Guardians of Lake Dunstan chairman Duncan Faulkner said the community seemed "relieved" Lake Parime had gone under shortly before the centre was due to open under a lease agreement with Contact Energy.
This has put a stop to the project for the time being, although Contact Energy has not commented on whether it is likely to be revived.
The UK-based company went into liquidation last month, following the appointment of two joint administrators from Interpath Advisory.
An Interpath Advisory statement said Lake Parime operated in the cryptocurrency sector, facilitating bitcoin mining, and had been hit by the "crypto winter" as the value of cryptocurrency fell.
The joint administrators sold the business and its assets to newly formed UK company Statar Mining Ltd, majority owned by Ron Ozer.
Lake Parime previously said it provided sustainable computing infrastructure for such things as machine learning, modelling, data visualisations, blockchain and cryptocurrency mining.
In November 2021, Contact Energy said a key condition of the agreement with Lake Parime was that it would offer a diverse range of data services.
Under the agreement Contact was to supply up to 10MW of renewable electricity to operate the centre, roughly equivalent to the power used by 10,000 homes.
Mr Faulkner said the administrators’ comments proved community concerns voiced in 2021 that the centre would be mainly used for cryptocurrency mining.
"It was an obvious risk from the beginning that should have been addressed," he said.
The project had been a money grab for all involved, and the way it was presented to the public had not helped to increase trust in Contact Energy.
However, all was not lost.
"A data centre would still be an excellent investment, but shouldn’t be used for cryptocurrency— it should be to aid local New Zealand industries not profit overseas companies looking to exploit energy resources."
Software developer Oscar McNoe, who first raised concerns about the transparency of the project in 2021, said popular cryptocurrencies had since fallen in value by 60%.
"That [Lake Parime has] now shut down is the final proof that they were indeed solely focused on cryptocurrency mining all along — in spite of what they said publicly, and said to Contact Energy."
It was convenient for Contact Energy to pretend publicly that it was not a cryptocurrency mining operation, although it might have been duped.
"Either way, Contact doesn’t look good."
The centre was now unlikely to open, he said.
This was good because if cryptocurrency mining became common, the volatility of the cryptocurrency market would affect the electricity market and push prices higher.
Contact Energy did not respond to criticisms of its transparency, but said all creditors had been paid.
A spokesman said Contact Energy would consider the future use of the site.
"Our first priority is to ensure the completion of the electricity substation with Aurora that will ensure future security of supply for the Clyde community,"
